Tokyo shares open higher on hopes for Covid peak

TOKYO: Tokyo's benchmark Nikkei index opened higher Thursday as US shares renewed record highs on hopes that the pandemic might have peaked, at least for now.

The Nikkei 225 index rose 0.22 percent, or 61.15 points, to 27,785.95 in early trade, and the broader Topix index firmed 0.12 percent, or 2.30 points, to 1,937.96.

The dollar stood at 110.08 yen, compared with 110.00 yen in New York Wednesday.

The Tokyo bourse rose on a new wave of improving sentiment on belief that Covid cases in the United States will eventually peak with the US Food and Drug Administration giving its full approval to the Pfizer/BioNTech vaccine.

Overnight on Wall Street the broad-based S&P 500 closed 0.2 percent higher at 4,496.19, its second consecutive record. The tech-rich Nasdaq finished up 0.2 percent at 15,041.86, setting a new all-time high for the third straight day.

The benchmark Dow Jones Industrial Average gained 0.1 percent.

"Buy orders dominated the early trade in Tokyo after US shares advanced," Okasan Online Securities said in a note.

"The market is seen testing its upside," it added.

But the Tokyo market may face profit-taking later in the day, as investors await the annual Jackson Hole symposium of central bankers and economists this weekend, analysts said.

Federal Reserve Chair Jerome Powell is due to make a speech on Friday in which he could signal changes to the US central bank's easy money policies, which have fuelled the big equity gains over the past year and a half.

Many economists caution however that the meeting may produce no major headlines with Powell seen unlikely to provide details just yet about plans to ease up on the Fed's massive bond purchases.

"As was the case on Wednesday, investors might start locking in profits once they finish an early round of buying," Okasan added.

In Tokyo, high-tech issues firmed.

Chip-making tool maker Tokyo Electron rose 1.63 percent to 45,480 yen while Chip-testing equipment maker Advantest added 1.56 percent to 9,120 yen.

SoftBank Group gained 0.55 percent to 6,247 yen.

Uniqlo-operator Fast Retailing added 0.29 percent to 73,430 yen. Toyota ticked up 0.21 percent to 9,504 yen.

Sony Group fell 1.88 percent to 11,250 yen.